Agency Bill

Newton User Guide: Accounting - Invoice/Billing

Related Pages

Agency Bill (Broker Billed) Direct Bill Direct Bill (Broker Billed) General Ledger Profile Invoice: Create An Invoice Policy & Billing

Related Categories

Agency Bill

Agency Bill processing is the process of entering Agency Bill invoices, entering client payments, and then reconciling the policies against the company accounts agency bill statement. The receivable, payable, income and expense values all come from creating the invoice.

Creating the invoice means you will do 3 later transactions:

• Receipt money from the client.
• Issue a check to the company less your commission.
• Issue a check to the producer if commission is included.

See Agency Bill (Broker Billed) for Broker Billed Agency Bill invoices.

Agency Bill Invoice Accounting Entries

An Agency Bill invoice for $1000, with 12% agency commission and 40% producer commission would result in the following balances:

GL Account	Name	Debit	Credit	Action
1120	Accounts Receivable	$1000.00		The client owes you $1000.00
5108	Producer Expense	$48.00		You have incurred an expense of $48.00, with a net income of $72.00 ($120.00 - $48.00)
2110	Company Payable		$880.00	You owe the company $880.00
4110	Agency Bill Income		$120.00	You have earned $120.00
2120	Producer Payable		$48.00	You owe the producer $48.00

In most offices, the money owed to the company or producer isn't considered "due" until the agency itself has been paid. Agency Systems can track that for you.

Receipt Money (Cash) From the Client Accounting Entries

When you enter cash from a client, the client balance is credited (reduced) and the bank balance is debited (increased). In our example, the client balance is currently $1000. When you get the money, it will alter these accounts:

GL Account	Name	Debit	Credit
1100	Cash in Bank	$1000.00
1120	Client Receivable		$1000.00

This sets the balance in the bank to $1000, and zeros the receivable from the client.

Company Check Accounting Entries

When its time to pay the company, you will create a check transaction in the system. You may be handwriting checks, but they still need to be created in the system to update your bank account and relieve the payable. The check will credit (reduce) the bank account and zero out the company payable.

GL Account	Name	Debit	Credit
2110	Company Payable	$880.00
1100	Cash in Bank		$880.00

Producer Check Accounting Entries

The check to the producer is similar; it will reduce your bank account and zero the producer payable. The system can tell which invoices your agency has been paid on so that you only pay the producer for the correct items.

GL Account	Name	Debit	Credit
2120	Producer Payable	$48.00
1100	Cash in Bank		$48.00

Agency Bill Processing - Final Accounting Entries

At the end of all of these transactions, the account balances are:

GL Account	Name	Debit	Credit
1100	Cash in Bank	$72.00
5108	Producer Expense	$48.00
1120	Accounts Receivable	$0.00
4110	Agency Bill Income		$120.00
2110	Company Payable		$0.00
2120	Producer Payable		$0.00